Commercial Lease Pro

Asad Haroon asked:


There are commercial leasing vendors for just about every piece of business-related equipment, including photocopiers, computers, office furniture, office space, etc. Commercial leasing allows a company to rent equipment and facilities instead of purchasing them. When you lease equipment, you will also be able to upgrade your equipment at the end of the term of the lease, which helps ensure that you have the latest technology available.

Leasing may offer substantial financial benefits because it is less capital-intensive and offers more flexibility, allowing a company to make short-term location and equipment decisions that can be easily changed at the end of the lease. Leasing may provide different tax and financial reporting treatment when compared to ordinary business expenses.

As you can imagine, choosing the right commercial leasing vendor can be challenging. If you need help Click Here. To ensure you find the right vendor for your needs, consider the following:

•Make a List of What You Need – Assess what pieces of equipment you will need. Do you need furniture or a commercial photocopier? Find a company that can provide more than one item because they may provide a bulk discount for multiple items.

•Space Leasing – Many office space facilities will also lease items such as furniture, a copier, and other equipment. Check before leasing these separately.

•Estimate Purchase Versus Lease – Some items may be worthwhile to purchase, such as computer, but remember, you will have to pay taxes at the time of purchase AND on an annual basis for as long as you have the items.

•Check References – Check the Better Business Bureau for information and do a Google search to uncover negative feedback about a company before you commit to a contract.

•Up-Front Fees – Many companies have up-front fees for their services. Ask about any and all fees associated with each lease. Some items may have different fees than others. You may pay a higher depreciated asset fee for a computer than you would for an office chair because of the rate of depreciation.

•On-Going Fees – What are the monthly fees to lease each item? How do these fees compare with comparable items that you could lease from other companies?

•Early Termination Fees – Make sure that you understand the early termination policy. If you choose to leave your current office space, will you be able to take leased items with you? Will you have to pay an early termination fee?

•Lease-to-Own – Some companies have lease-to-own programs so companies can make purchases at a lesser rate at the end of the period of the lease. If you decide that you want to keep certain items, you may wish to have the option of purchasing them once the lease expires.

•Damage and Replacement Fees – Who covers the cost to replace or repair a piece of equipment that you accidentally damage? What is considered normal wear and tear? Make sure you understand the fees in advance.

Before entering into an expensive commercial leasing contract, check with your accountant to see how it will impact you vs. purchasing. If you want commercial leasing vendors to compete for your business, click here. For additional information, you can visit our Commercial Leasing wiki.

Bryan Halverson asked:


With the benefits of leasing over purchasing office equipment outright, many start-up businesses and expanding businesses are making the choice to lease office equipment. Businesses often choose the leasing option due to the benefits offered over buying. Leasing offers tax deductions, credit building, preserving initial cash flow, flexible terms and the ability to upgrade equipment easily. With all of the benefits leasing is a likely option when it comes to making the decision to buy or lease. After the decision is made to lease, where do you start?

Start with Planning

Planning is always a good place to start with any venture including when you decide to lease office equipment. Make sure you are aware of the space you have to work with concerning usable space. It is not feasible to have a top of the line copier, when the space allotted is not big enough to accommodate the equipment.

Research

The web has thousands of sites and reviews dedicated to the equipment pieces you are interested in leasing. Narrow down the pieces you might lease and check reviews in a few different places. Also research the average monthly cost. Savings of $50-$100 a month can save $600 – $1200 a year.

Understand Fair Market Value

Financial assets and liabilities give information towards fair values more so than historical costs value. The fair market value assesses the price at which a willing party would pay for the product at hand.

Know the Businesses Credit History

Leasing companies do run credit history to get a better understanding of what type of client you will be. Know the credit score of your company lower scores equate to higher interest rates and/or higher initial deposits. Know if credit will solely run off of credit bureaus, business references such as banks, or off of personal history. Knowing your business credit will help for better positioning during leasing term negotiations.

Understand the Terms of a Lease

One of the benefits of leasing is having varied leasing terms that are more accommodating to your business needs. A commercial leasing vendor should be more than just a leasing mill. The leasing company should be rooted in customer service. Do not be hesitant is asking for assistance with research and planning. A good leasing agent should be willing to help your business succeed, not just get you sign on the bottom line and write a monthly check.

With the various benefits of leasing office equipment, this is a business decision that should be taken seriously. Office equipment does seem to be a passive commodity, depending on the nature of the business. However the decision should not be passive. Make sure when you begin to lease office equipment you research, plan and know your standing when leasing equipment. You should also find a leasing agency willing to work with your business to accomplish your leasing needs in accordance with your business.

The points mentioned above should be more than enough in allowing you to understand the procedure to lease office equipment.

Tim Knox asked:


In the last article we looked at a few of the things you should consider before leasing that first office or storefront for your business. To recap, you should not only consider the old standard “location, location, location,” but also consider things like sufficient parking, the number of employees who will be working onsite, and future growth projections. I stressed that it was important not to get caught up in the moment. You should take your time to find the space best suited for your business for the long haul, not just for today.

This week we’ll discuss the most important aspect of the process: signing a commercial lease (insert dramatic music here). One of the biggest mistakes many entrepreneurs make when leasing commercial space is not reading the lease. Forget reading the fine print. When it comes to a lease its ALL fine print.

Don’t believe me? Let me tell you the true story of my friend, Homer, whose name I have changed to protect the ignorant. Homer signed a two year lease on a suite of offices for his business. As the owner of the business Homer signed on the dotted line and agreed to personally guarantee payment of the lease and to abide by its terms. Homer moved in and it was business as usual until the end of the two year lease term drew near. It was then that Homer discovered that failing to read the lease was going to be a very costly mistake.

Toward the end of the two year lease period Homer decided to relocate, but when he gave the landlord what he thought was the customary 30 day notice, he discovered that the lease had automatically renewed for another two year term at the 60 day notice point. In other words, Homer didn’t realize that the lease required a minimum of 60 days notice to let the landlord know that the lease would not be renewed. Because Homer did not know that he was required to give at least 60 days notice of his intent to vacate, the lease automatically renewed for another two years. And there was not a darn thing Homer could do about it but reach around and slap himself in the back of the head for not taking the time to read the lease.

What was the landlord’s position when Homer pointed out that he had not read the lease and therefore was not aware of the 60 day notice? The landlord, while sympathetic to Homer’s plight, stuck to his guns and told Homer that he would have to honor the lease, which meant that even if Homer moved out as planned, he was still on the hook for paying the rent for another two years.

Does the fact that the landlord chose to enforce the lease agreement rather than let Homer off the hook make him an evil man? Not at all. From the landlord’s point of view, he had no choice but to enforce the terms on the lease. He had a signed contract that told him his space was going to be rented for the next two years. He had not planned on the space suddenly being vacant. Being a landlord with unrented space is like being a business with no paying customers. Empty space means no revenue from rental fees which means no money to pay the mortgage payment. As the old saying goes, “It’s just business…”

Sure, any landlord with a heart might feel bad that Homer was ignorant of the auto-renewal clause, but not so bad that they are willing to risk their own financial well-being by having Homer’s space sit vacant. The bottom line is this: whether Homer read the lease or not is irrelevant. Homer signed the lease, thereby agreeing to its terms, and therefore he must hold up his end of the bargain, period.

As of this moment, Homer is relocating his business in spite of not being able to get out of his old lease and he will continue paying the payment on the vacated space for the remaining two year term of the lease or until he can sublease the space. Even then Homer is not fully off the hook because he will still be considered the legal tenant unless his sublessor agrees to sign a new lease with the landlord. Hopefully he will just have someone else making the lease payments.

Again, the moral to this story is READ THE LEASE. Or even better, have an attorney read it for you. I have learned over the years to never sign a legal document of any kind without letting my attorney review it, especially if the document involves money and my first born child.

Here are a few other points to ponder before signing a commercial lease.

How is the lease payment calculated? The most basic equation for calculating a lease payment takes the number of square feet times the cost per square foot, then amortizes that over a 12 month span. For example, if you have 1,000 square feet and the cost per square foot is $12, the annual lease payment would be $12,000. Divided by 12 months the monthly lease payment would be $1,000. Again, this is a simplified scenario. These days most commercial leases include additional factors that affect the final price, such as rent increases, operating expense escalations, common area charges, etc.

Who pays for what? It’s important that you understand exactly what you are paying for. Are you responsible for any costs other than the rent? Will you be responsible for paying your own utilities, for example? Will you have to pay for parking privileges or janitorial service? Who handles maintenance and repairs?

Is there an escalation clause? It is typical that the lease contain what’s known as an escalation clause that allows the landlord to pass on increased building operating expenses to the tenants. If your lease contains such a clause you should ask for a cap on the amount the lease payment may rise over a given period of time. And if the escalation clause is ever activated by the landlord you are well within your rights to ask for an itemized accounting of the expenses that are being considered as cause for your raise in rent.

What rent increases might there be? One very important factor to know is this: if you do renew the lease how much can the landlord go up on the rent? It is expected that rents will increase as property values increase. If your landlord can rent the space for more than you agreed to pay a year ago, he is within his rights to ask for the increase. However, it would be a nightmare if your rent suddenly doubled overnight. Negotiate the increase before you sign the lease. Most rent increases are calculated by percentage, not by flat rates.

Renewals and terminations. Most leases require that you give a minimum of 60 days notice if you intend to terminate the lease and vacate the property. As Homer learned, many leases also renew automatically for another term unless you give notice within 60 days of expiration. Know when your lease expires and the time required to give notice.

Is a personal guarantee required? What happens if your business goes south and can no longer afford to make the lease payment? Are you then responsible for paying the rent out of your own pocket? Probably so. Most landlords insist on a personal guarantee from the owner or an officer of the business. This means that even if you go out of business you are still personally on the hook for the remainder of the lease.

Finally, clarify all points. You should be clear on every point in the lease. And if you are not, ask for clarification. Exactly what space are you leasing? Who is responsible for repairs? What common areas will you have access to? Who is responsible for maintaining the little things, like keeping the shared restrooms stocked with soap, towels, and most importantly, toilet paper.

A small detail to consider now, but not when you suddenly find yourself without such amenities at the wrong time.

Jessica Thomson asked:


If specifically talking about the Van leasing proposition in terms of the genre of leasing then it is defined as the ability to pay for your commercial vehicle over the period of time.  The defined period normally ranges from 3 – 5 years, but you can take a shorter term lease to suit your needs which can be normally for 30 days or more.  Most finance companies even offer the choice of leasing your new commercial vehicle, or contract hire to furnish your requirements in a flexible and highly convenient style.

In the current scenario Van leasing is not only a great way to get vehicles for your business but also an effective solution that eases the tension of being burdened with the hassles of ownership.

If analyzed from the practical viewpoint then there is not really much of a difference between the concept of renting a car from the holiday viewpoint and the concept of commercial vehicle leasing. Through the feasibility of van leasing, one is required to pay for the use of the vehicle for a stipulated time period.

The primary difference between van renting and van leasing comprises of the amount of time that one agrees upon for using the leased or contract hired vehicle.

With the easy availability of services through the simple online concept one can easily explore the avenues of Van leasing and in this regard, one of the reliable names to trust upon is certainly of Freedom Commercials.

But before trying out these professional services one should be quite well acquainted with some of the basic functional aspects of this application.

From the perspective of car and van leasing the value of a vehicle is usually determined by its ‘residual value’ and not via its purchase price.

The residual value is basically described through a approximate calculation of the value of these lease vans towards the end or completion of the period of lease, which also takes into account the specific depreciation in the lease van’s value.

The convenience that one enjoys through the unique and comfortable facility of commercial vehicle leasing is that the payment module which is on a monthly basis is determined through the difference in the value of retail price of the vehicle vis a vis its residual value. This aspect not only facilitates the leasing process to serve you with properly framed periodic intervals for accomplishing your payments in an easy style but also helps you in settling down with a perfect option that can viably cater to your immediate requirements.

To add on to the overall effectiveness of the concept this also establishes the fact that through this facility you pay comparatively quite less.

So undoubtedly the facility can be of great help when seeking an immediate and monetarily balanced option.

Shivani Gurtu-Louth asked:


Businesses of all sizes are drawn to London. The capital is the global centre for many diverse industries and is full of attractive commercial property.

With a population of more than eight million and an eclectic mix of people and city offices, London has something to offer every firm. Moving offices or buying commercial property in London is sadly not as easy as one might hope, but with some expert knowledge and office relocation help, firms quickly enjoy its numerous opportunities.

Commercial property markets have struggled following recent international credit shortages. However, falling values have attracted numerous overseas buyers and some commercial property still retains a premium. The recent sale of Mayfair offices by Hermes Real Estate at a four per cent yield is a useful example.

Businesses looking to resize and move to new offices have to consider the cost of moving and the benefits of hiring office specialists to help. By employing an agent, a company can also continue driving its business forward, while an office relocation project manager takes care of the details.

Commercial property agents are best placed to understand these market developments. This ‘inside view’ could be of even greater help to companies moving to London for the first time. Experts say that commercial property agents can offer those looking for office space a number of key advantages.

When representing a tenant, they can be trusted to find a property at the right price – not necessarily one that the landlord is looking to achieve. Equally, the opportunity to harness the insider knowledge of commercial letting agents – who may know about good locations due to come onto the market, can give firms a head-start. Rather than simply scanning available office space and wasting time continually checking what is available, interested tenants can be alerted by those in the know.

The same grounding is also useful when it comes to the crunch. Commercial estate agents are aware of the market moves and will have their finger on the pulse when it comes to knowing what might be around the corner – will the location, for example, be set for major new transport links, like Stratford following the construction work done for the Olympic Games; or is the nearby Tube station set to close for the first six months of the commercial lease? With an understanding of the local area and the market conditions in what are changing times for the property market, an agent can help a tenant find the right space at the right price and make the new site or office relocation that much smoother.

Companies moving to London need first to decide where in the capital they want to be. London has excellent public transport connections, although even small companies looking for budget relocations should consider their choice of location carefully.

By using a commercial property expert, they can find a number of offices and benefit from specialist local knowledge.

New London mayor, Boris Johnson, has new plans to create more open spaces and waterways which investors hope will further add to the city’s qualities. The Times reported his planning advisor, Sir Simon Milton, saying Boris’s big theme is “quality of life”.

So whether it is in or out of work, companies planning office relocations can expect their staff to enjoy the best London has to offer.

Tim Knox asked:


Last week we looked at a few of the things you should consider before leasing that first office or storefront for your business. To recap, you should not only consider the old standard “location, location, location,” but also consider things like sufficient parking, the number of employees who will be working onsite, and future growth projections. I stressed that it was important not to get caught up in the moment. You should take your time to find the space best suited for your business for the long haul, not just for today.

This week we’ll discuss the most important aspect of the process: signing a commercial lease (insert dramatic music here). One of the biggest mistakes many entrepreneurs make when leasing commercial space is not reading the lease. Forget reading the fine print. When it comes to a lease its ALL fine print.

Don’t believe me? Let me tell you the true story of my friend, Homer, whose name I have changed to protect the ignorant. Homer signed a two year lease on a suite of offices for his business. As the owner of the business Homer signed on the dotted line and agreed to personally guarantee payment of the lease and to abide by its terms. Homer moved in and it was business as usual until the end of the two year lease term drew near. It was then that Homer discovered that failing to read the lease was going to be a very costly mistake.

Toward the end of the two year lease period Homer decided to relocate, but when he gave the landlord what he thought was the customary 30 day notice, he discovered that the lease had automatically renewed for another two year term at the 60 day notice point. In other words, Homer didn’t realize that the lease required a minimum of 60 days notice to let the landlord know that the lease would not be renewed. Because Homer did not know that he was required to give at least 60 days notice of his intent to vacate, the lease automatically renewed for another two years. And there was not a darn thing Homer could do about it but reach around and slap himself in the back of the head for not taking the time to read the lease.

What was the landlord’s position when Homer pointed out that he had not read the lease and therefore was not aware of the 60 day notice? The landlord, while sympathetic to Homer’s plight, stuck to his guns and told Homer that he would have to honor the lease, which meant that even if Homer moved out as planned, he was still on the hook for paying the rent for another two years.

Does the fact that the landlord chose to enforce the lease agreement rather than let Homer off the hook make him an evil man? Not at all. From the landlord’s point of view, he had no choice but to enforce the terms on the lease. He had a signed contract that told him his space was going to be rented for the next two years. He had not planned on the space suddenly being vacant. Being a landlord with unrented space is like being a business with no paying customers. Empty space means no revenue from rental fees which means no money to pay the mortgage payment.

As the old saying goes, “It’s just business…”

Sure, any landlord with a heart might feel bad that Homer was ignorant of the auto-renewal clause, but not so bad that they are willing to risk their own financial well-being by having Homer’s space sit vacant. The bottom line is this: whether Homer read the lease or not is irrelevant. Homer signed the lease, thereby agreeing to its terms, and therefore he must hold up his end of the bargain, period.

As of this moment, Homer is relocating his business in spite of not being able to get out of his old lease and he will continue paying the payment on the vacated space for the remaining two year term of the lease or until he can sublease the space. Even then Homer is not fully off the hook because he will still be considered the legal tenant unless his sublessor agrees to sign a new lease with the landlord. Hopefully he will just have someone else making the lease payments.

Again, the moral to this story is READ THE LEASE. Or even better, have an attorney read it for you. I have learned over the years to never sign a legal document of any kind without letting my attorney review it, especially if the document involves money and my first born child.

Here are a few other points to ponder before signing a commercial lease.

How is the lease payment calculated? The most basic equation for calculating a lease payment takes the number of square feet times the cost per square foot, then amortizes that over a 12 month span.

For example, if you have 1,000 square feet and the cost per square foot is $12, the annual lease payment would be $12,000. Divided by 12 months the monthly lease payment would be $1,000. Again, this is a simplified scenario. These days most commercial leases include additional factors that affect the final price, such as rent increases, operating expense escalations, common area charges, etc.

Who pays for what? It’s important that you understand exactly what you are paying for. Are you responsible for any costs other than the rent? Will you be responsible for paying your own utilities, for example? Will you have to pay for parking privileges or janitorial service? Who handles maintenance and repairs?

Is there an escalation clause? It is typical that the lease contain what’s known as an escalation clause that allows the landlord to pass on increased building operating expenses to the tenants. If your lease contains such a clause you should ask for a cap on the amount the lease payment may rise over a given period of time. And if the escalation clause is ever activated by the landlord you are well within your rights to ask for an itemized accounting of the expenses that are being considered as cause for your raise in rent.

What rent increases might there be? One very important factor to know is this: if you do renew the lease how much can the landlord go up on the rent? It is expected that rents will increase as property values increase. If your landlord can rent the space for more than you agreed to pay a year ago, he is within his rights to ask for the increase. However, it would be a nightmare if your rent suddenly doubled overnight. Negotiate the increase before you sign the lease. Most rent increases are calculated by percentage, not by flat rates.

Renewals and terminations. Most leases require that you give a minimum of 60 days notice if you intend to terminate the lease and vacate the property. As Homer learned, many leases also renew automatically for another term unless you give notice within 60 days of expiration. Know when your lease expires and the time required to give notice.

Is a personal guarantee required? What happens if your business goes south and can no longer afford to make the lease payment? Are you then responsible for paying the rent out of your own pocket? Probably so. Most landlords insist on a personal guarantee from the owner or an officer of the business. This means that even if you go out of business you are still personally on the hook for the remainder of the lease.

Finally, clarify all points. You should be clear on every point in the lease. And if you are not, ask for clarification.

Exactly what space are you leasing? Who is responsible for repairs? What common areas will you have access to? Who is responsible for maintaining the little things, like keeping the shared estrooms stocked with soap, towels, and most importantly, toilet paper.

A small detail to consider now, but not when you suddenly find yourself without such amenities at the wrong time.

Here’s to your success!

Tim Knox tim@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net

D Walker asked:


Consumers in today’s market are looking for properties of all types, for many reasons. Some of the most popular spaces being sought out are Office Spaces for either rent or lease. In our faltering economy many have come to the realization that owning their own business is a must and they are seeking ways to accommodate this all too real “dream”.

On the other hand, many large businesses are also realizing that they must “downsize” in terms of their employees and locations. Many owners and managers are starting to look for commercial rental properties and office spaces for rent to lower the costs of running their businesses. Office Space is a United State comedy enterprise emerged in 1999, and was written by a notable Business man known as Mike Judge. This practice centers on individuals who are tired with their present jobs. The mission was to sympathized ordinary IT workers including those in professional levels and equally addresses various conversant topics to the working class in particular and Office workers in general.

In the hunt for the optimal office rental space, owners are turning to outside sources to help locate prime pieces of commercial property. In an effort to find the perfect location, they are enlisting help from traditional sources such as Re/Max, Coldwell Banker or traditional banks, who have excellent reputations for finding “any property for any need”. These types of traditional real estate brokerage services and banking systems have mostly unlimited resources online and offline to assist in your office space hunt. These types of services are excellent for busy owners who do not have the time to look for rental properties on their own. They can specify to the agent what type of Office Space they are looking to rent or lease, the agent then finds multiple properties for the busy owner to review and chose from, and then they can visit the property at a time that is convenient for both.

Moreover, being used for locating commercial property for lease and rent is the internet. The World Wide Web has become a massive library of “on the spot” information and has put almost any type of resource at ones fingertips. Go to any search engine and use a few keywords and VIOLA! Many results are listed and depending on what exactly you are looking for you could find office space within a few minutes. Some really useful and more popular sources on the internet are also traditional business, such as Re/Max – you can find an agent or find a rental property on your own. A few other popular sources are Loop Net, Property Line, and Realty.com. You can locate space for lease or rent in any city you wish, view pictures of the property if available, see the stats of the property and locate ways to contact the owner or party leasing the property. Commercial property and Office Space, whether for rent or lease, can be found through many resources that are readily available and highly visible.

R. Neal asked:


Enhanced illumination contributes to a more positive and focused work environment in the office. It helps improve employee morale, and it contributes to increased productivity which can be vital to recession proofing a business. Of course, many businesses may feel that now may not be the best time to invest in a comprehensive overhaul of their interior lighting system. For such companies, commercial recessed electric lights offer an affordable enhancement to the existing general lighting system that represents a safe-bet investment in any market place and also helps to reduce liability and improve general safety.

A certain number of foot-candles are needed for clear visibility and safe mobility within a building. Pockets of shadow and low levels of light represent areas where employees can injure themselves or suffer from eye strain caused by insufficient light. Commercial electric recessed lights are ideal for improving illumination in these areas and increasing visibility so employees can more easily perform tasks and move between stations when necessary. Reducing work related physical stress and minimizing the risk of injury helps decrease the potential liability for an organization with substandard levels of lighting. Something as simple as installing a few commercial recessed electric lights can potentially qualify a company for reduced commercial liability insurance rates, provided the contractor who installs the recessed lights provide the organization with a photometric analysis that details the improved quality of interior lighting and shows where newly installed recessed light fixtures work provide new directional lighting for important tasks in key areas of human traffic and activity.

Recessed electric light fixtures are also an ideal source of accent lighting in commercial interiors. Meeting rooms and foyers are two very important places that every company should spend the money to literally put in the best possible light. Recessed electric fixtures in these rooms can be wired to dimmers and remote control unites that allow for the light to be set to appropriate levels for different events. Speakers, sales presentations, private meetings, and even video conferencing will all benefit from the enhanced and flexible illumination produced by commercial recessed electric light fixtures.

To determine fixture specifics such as housings, trims, and lamp types, it is necessary to quantify floor and vertical cube space, and to learn as much as possible about key activities essential to the client’s operation. This information can then be passed on to us so that we may process this data using sophisticated design software that generates a comprehensive photometric analysis of the client’s interior office space. This photometric assessment details a point by point, room by room breakdown of required levels of lighting and optimal locations for fixture placement.

Once these things have been determined, it is much easier to determine exactly how many recessed electric lighting fixtures are actually needed, and which housings, trims, and lamp types will best meet the requirements of the proposed installation. For ceilings that cannot be cut due to restricted clauses in the client’s commercial lease, retrofit recessed lighting fixtures may be the best way to go. Smaller companies who feel the pain of investing even in a few new ceiling lights can be reassured with the promise of lowering power bills with low voltage fixtures. Unique interior architecture such as sloped ceilings can also be accommodated with special recessed electrical light fixtures made just for such interiors.